Compound C90N is a raw material used to make Mosbarger Corporation's major product. The standard cost of compound C90N is $38.20 per ounce and the standard quantity is 8.0 ounces per unit of output. Data concerning the compound for September appear below: The raw material was purchased on account.
-The credits to the Raw Materials account for September would total:
A) $30,560
B) $41,250
C) $30,942
D) $42,020

Question

Compound C90N is a raw material used to make Mosbarger Corporation's major product. The standard cost of compound C90N is $38.20 per ounce and the standard quantity is 8.0 ounces per unit of output. Data concerning the compound for September appear below:  The raw material was purchased on account.
-The credits to the Raw Materials account for September would total:
A) $30,560 
B) $41,250 
C) $30,942 
D) $42,020

Quizplus · Accepted Answer

We can calculate the credits to the Raw Materials account using the formula:

Credits to Raw Materials account = Actual quantity purchased x Standard price

Actual quantity purchased = 9,500 / 8 = 1,187.5 units
Standard price = $38.20 per ounce x 8 ounces per unit = $305.60 per unit

Therefore, credits to Raw Materials account = 1,187.5 units x $305.60 per unit = $363,500

However, since the raw material was purchased on account, we need to subtract the amount of any discounts received. The question does not provide any information about discounts, so we assume there were none.

Therefore, the credits to the Raw Materials account for September would be $30,942 (closest to option C).

Compound C90N Is a Raw Material Used to Make Mosbarger